Britain’s biggest building society has cut its mortgage rates for the second time in two weeks, with changes including a new best-buy for home movers.
Nationwide has cut rates by up to 0.3 percentage points across a number of two, three, five and ten-year fixed rate mortgages. It has also lowered its two-year tracker products.
Halifax has also announced it will be reducing rates by up to 0.18 percentage points while and TSB and Virgin Money are lowering deals by up to 0.2 percentage points.
The re-pricing comes ahead of the next Bank of England interest rate decision tomorrow.
The expectation is that the central bank will cut the bank rate from 4.5 per cent to 4.25 per cent.
Nationwide has cut rates by up to 0.3 percentage points for new and existing customers
Ken James, director at broker Contractor Mortgage Services says the current environment is very positive for prospective homebuyers and those looking to remortgage.
He told the news agency Newspage: ‘The current flurry of cuts have started to re-ignite the market and business is certainly starting to pick up momentum.
‘The potential for another base rate cut this week can only add more fuel to this fire, and long may it burn.’
What are Nationwide’s new rates?
For new and existing borrowers looking to move home, rates start from 3.84 per cent if they fix for two or five years, though this comes with a £1,495 fee.
On a £200,000 mortgage being repaid over 25 years, that would mean paying £1,038 a month.
While this is a market leading rate at present, it may not be the cheapest deal overall given the high fee.
You can compare rates and fees and work out the cheapest deal using This is Money’s true cost mortgage calculator.
Nationwide is offering a lower £999 fee option with a 3.89 per cent rate available as well. Santander is also offering this exact same rate and fee.
Nationwide has also cut rates for those with smaller deposits.
Its cheapest two-year fix for those moving home with a 15 per cent deposit, for example, is now 4.19 per cent with a £999 fee.
This is only bettered by Bank of Ireland, which is currently offering a 4.18 per cent rate, albeit with a slightly higher £1,195 fee.
Nationwide is also now offering a sub-4 per cent deal to first-time buyers for the first time since September last year.
The lowest first-time buyer rate is 3.94 per cent and available on a two-year fixed rate product for those buying with at least a 40 per cent deposit. It also comes with a £1,499 fee.
There is also a £999 fee option charging 3.99 per cent.
Rates have also been reduced for first-time buyers with smaller deposits. For example, for those buying with just a 5 per cent deposit, Nationwide is offering a five-year fix at 4.79 per cent rate with a £999 fee.
On a £200,000 mortgage being repaid over 25 years that would equate to £1,145. If the term is stretched to 30 years that would reduce to £1,049 a month.
Will mortgage rates keep falling?
With a Bank of England interest rate cut almost nailed on tomorrow, many expect further mortgage rates cuts to come over the next few weeks.
Ranald Mitchell, director at Charwin Mortgages told the news agency, Newspage: ‘Nationwide haven’t just trimmed rates, they’ve taken a sledgehammer to them, with cuts of up to 0.3 per cent.
‘It’s a clear sign that the mortgage market is swinging back in favour of borrowers as lenders fight for attention.’
Mitchell, Director at Charwin Mortgages added: ‘This is more fantastic news for borrowers, especially as these cuts affect a wide range of the market.
‘If the Bank of England cuts the base rate, as expected on Thursday, we’ll likely see further cuts in the weeks ahead.
‘This does beg the question of whether borrowers should wait to see if they decline further, but the trend is only going in one direction at present.’
